Finance Formulas Ratios
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Asset Ratio
Inventory Turnover
Sales / Inventory

Asset Ratio
Days Sales Outstanding or Asset Collection Period
Accounts Receivable / (Annual Sales/365)
(Answer in Days)

Asset Ratio
Fixed Asset Turnover
Sales / Net Fixed Assets

Asset Ratio
Total Asset Turnover
Sales / Total Assets

Debt Ratio Management
Debt
Total Liabilities / Total Assets

Debt Ratio Management
Times Earned Interest
(TIE)
EBIT / Interest Charges

Debt Ratio Management
EBITDA Coverage
(EBITDA + Lease Payments) / (Interest + Principal Payments + Lease Payments)

Debt Ratio Management
Debt to Equity
Total Liabilities / (Total Assets  Total Liabilities)

Debt Ratio Management
Market Debt
Total Liabilities / (Total Liabilities + Market Value of Equity)

Dupont Ratio
Return on Asset
(ROA)
 Profit Margin x Total Asset Turnover
 (Net Income/Sales) x (Sales/Total Assets)

Dupont Ratio
Equity Multiplier
Total Assets / Common Equity

Dupont Ratio
Return on Equity
(ROE)
 ROA x Equity Multiplier
 (Profit Margin x Total Asset Turnover x Equity Multiplier)

Liquid Ratio
Current
Current Assets / Current Liabilities

Liquid Ratio
Quick
(Current Assets  Inventory) / Current Liabilites

Market Value Ratio
Price / Earnings
(P/E)
Price per Share / Earnings per Share

Market Value Ratio
Price / Cash Flow
Price per Share / Cash Flow per Share

Market Value Ratio
Market / Book
(M/B)
Market Price per Share / Book Value per Share

Profitability Ratio
Net Profit Margin on Sales
Net Income Available to Stockholders / Sales

Profitability Ratio
Basic Earning Power
(BEP)
EBIT / Total Assets

Profitability Ratio
Return on Total Assets
(ROA)
Net Income Available to Stockholders / Total Assets

Profitability Ratio
Return on Common Equity
(ROE)
Net Income Available to Stockholders / Common Equity

Profitability Ratio
Operating Profit Margin
EBIT / Sales

Profitability Ratio
Gross Profit Margin
(Sales  Cost of Goods Sold) / Sales